Will OTT Services Eat Telecom's Lunch?

Updated on January 3, 2013

Mobile VoIP Adoption

Internet-Enabled Over-The-Top Services

The Internet is quickly emerging to be the perfect conduit for all kinds of data. It is one of the only general-purpose networks available that doesn't care about the actual content that goes over it. As a result, any kind of information can be digitized and sent over the wires – including voice, video, SMS and e-mail. As a result, many specific purpose networks are facing the heat as more and more of their revenues are migrating to application developers who provide the same services over the Internet. This trend is exacerbated by the fact that it is easily available in a myriad of forms to everyone. You can access the Internet on your PC, using Wi-Fi on your smart phone, as well as with wireless data services provided by the telecom carriers.

Predictably, this causes a conflict of interest with providers of Internet services who also offer other communication products. VoIP in particular is an extremely powerful threat and most professional analysts are in agreement that it would eat up a large portion of the revenues currently enjoyed by telecom carriers. Until and unless they come out with their own competing products, they're going to be relegated to providing data services as their primary offering.

All of these services that the Internet has replaced are called "Over the Top" or OTT services. Another example is video streaming with companies like Netflix experiencing exponential growth sometimes at the cost of cable companies who are unable to compete with the wide variety and on demand programming. To make matters worse, these very same cable companies are also most likely providing Internet services and so are in part responsible for the cannibalization of their own products.

But there really is not much they can do about it. Not for lack of trying though. Comcast for example recently tried to exclude its own video service offerings from the bandwidth data caps that would otherwise be applied to third-party applications like Netflix. This raised a hue and cry among consumer advocates who said that it was a violation of the Internet neutrality rules promulgated by the FCC.

Mobile VoIP - though growing at a rapid pace is still in its infancy. It is estimated that there will be 1 billion mobile VoIP users by 2017 – or one in seven customers. This is clearly a growing market and there is plenty of space for everyone to compete. The powerful features coupled with low prices of VoIP will make it an irresistible offering for both consumers and businesses alike. Contact your local Chicago PBX provider to find out how to get started today. Click here to find out more.